ISM Non-Manufacturing
An Unwelcome Surprise?
Several measures of U.S. economic “surprises” have soared to all-time highs in the last couple of months, showing that even economic forecasters have finally learned to play the corporate game of “under-promise then over-deliver.” Mind you, that’s only 30 years after most industrial firms eliminated the role of “staff economist.”
The NOPE Index Says “Nope!”
The most valuable gauge we construct from the ISM Manufacturing and ISM Non-Manufacturing reports sunk into bear territory with the April update, signifying a serious margin squeeze has hit the service sector.
Last Bastion Breaking Down?
We’ve been expecting weakness in the manufacturing sector to spread to the service economy, but were not prepared for the nearly four-point drop in the latest ISM Non-Manufacturing Composite. We don’t want to overplay a single monthly reading from an historically volatile report, but the Non-Manufacturing Price Index spiked despite the drop in New Orders.
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